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The Nepali market for electric vehicles (EVs) has been growing at a steady pace. With the denizens of Kathmandu becoming more and more concerned about the growing pollution rate in the valley, the sales of EVs has picked up tremendously, say automobile dealers.

The domestic market is currently dominated by fast-moving electric vehicles (EVs) run by lithium-fed batteries, in comparison to traditional EVs that use lead-acid battery and run at low speed. Dealers also say that the market is responding well to luxury EVs.

At the 13th edition of the Nepal Automobile Dealers Association (NADA) Auto Show 2018, automobile dealers are excited to showcase their best EVs to attract more consumers. Sipradi Traders, the authorised distributor of Tata Motors in Nepal, is all set to showcase their Tata Tigor. The EV is available in four variants: XE, XT, XZ and XZ (O).

Similarly, Continental Trading Enterprises, the authorised distributor of Kia Motors in Nepal, is also planning to showcase the EVs that are listed in its product portfolio. Prasiddha Khadka, senior marketing officer of Kia Motors, said the market for electric vehicles has been growing in recent years, with the company selling 77 units of Kia Soul electric vehicle in just two years, he said.

The company has also already installed charging station for electric vehicles (EV) at Riverside Resort at Mugling, and is planning to add charging terminators at other places. According to the company, it has also been providing designated after-sales services for its EVs.

To encourage and promote the use of EVs, the government has also recently adopted new policies. Prem Kumar Singh, director of the Department of Transport Management, said the government has been providing indirect subsidies, such as a reduction in custom duty, to users of EVs. “In comparison to the heavy customs duty that fossil fuel-run cars have to pay, EVs pay only 1-10 percent of customs duty,” Singh said.

The fiscal budget of 2016-17 has also revised customs tariff on the import of electric vehicles. The customs tariff of big electric vehicles (bus, minibus, etc), normally used for public transportation, have been slashed to one per cent (of the total cost), from its previous 30 per cent. Similarly, electric four-wheelers used for individual purposes need to pay only 10 per cent customs tariff against the 30 per cent they had to pay previously. In addition, there is no excise duty charged on the EVs, as per the department. Similarly, the government has also waived 50 percent of the annual tax to facilitate users of battery-powered vehicles.

Singh added that the department registers two-wheeler EVs with battery capacity of at least 1,500 watts. According to him, the unavailability of experts and low number of charging stations are the underlying challenges in the segment. If these challenges are addressed, the EV segment would see a boost in sales..

Contradicting Singh, NADA Acting President Krishna Dulal criticised the government for providing low subsidies. Apart from the subsidies, the authority has also failed to provide the necessary infrastructures such as smooth electricity supply and charging stations, Dulal said.

Similarly, NADA Past President Anjan Shrestha said the government needs to come up with a national policy that will promote the use of EVs. Through the policy, the government needs to standardise EV-related logistics, including the uniformity in the circuit plug that is used at charging stations. “In addition, the policy could ensure an adequate number of charging stations and a smooth supply of electricity,” Shrestha said.

A 2017 report published by the Ministry of Urban Development says electric vehicles and non-motorised transport can play an important role in reducing emission in cities like Kathmandu Valley where the rising level of pollution has become a major health concern. However, Nepal still lacks the policy to encourage and promote the use of emission-free vehicles.

Nepal is under pressure to expand its use of EVs because its two giant neighbours have announced to replace fossil fuel-run vehicles with EVs in the near future. While India has announced to end its sales of gas and diesel cars by 2030, China has also announced to phase out the production and sale of gas and diesel vehicles between 2030 and 2040.

Nepal also has a comparative advantage in using EVs as the country has a huge hydroelectricity potential to replace fossil fuel. This use of EVs could also perhaps keep in check the widening trade deficit in which the petroleum products share a major stake. According to the macroeconomic report of Nepal Rastra Bank, the country imported fuel worth Rs170.13 billion in 2017-18.

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Established in February 1993, the Kathmandu Post, Nepal’s first privately owned English broadsheet daily, is today Nepal’s leading English language newspaper, with a daily circulation of 82,000 copies. This makes the Post Nepal’s second-most widely circulated newspaper—after Kantipur daily. The Kathmandu Post is also a member of Asia News Network that has over 15 members and is known for its insightful, unbiased journalistic work of the highest calibre. Read more»